Technology and Social Change

Lecture 3: Ancient Societies and Technology

Bogdan G. Popescu

Tecnológico de Monterrey

Part 1: Motivating Puzzles & Learning Objectives

Why Did Ancient Societies Rarely Experience Sustained Growth?

Rome had concrete, roads, aqueducts—then centuries of stagnation

China invented paper, printing, and gunpowder—yet no industrial revolution

Mesopotamia created writing, mathematics, law—empires still collapsed

For ~10,000 years, most humans lived near subsistence

The “modern breakthrough” is only ~250 years old

FIGURE 1 — The Long Stagnation: GDP Per Capita Over 10,000 Years


FIGURE 2 — Population Growth: Another Perspective on Stagnation


Guiding Questions

How did political institutions emerge from egalitarian forager bands?

Why do some societies innovate while others suppress new technologies?

What role do factor prices play in directing technological change?

Can we predict which societies develop growth-promoting institutions?

Learning Objectives

By the end of this lecture, you should be able to:

  1. Define “institutions” and distinguish formal vs informal constraints (North 1990)

  2. Explain Boix’s producer–looter model of state formation (Boix 2015)

  3. Apply Allen’s induced innovation hypothesis to historical cases (Allen 2009)

  4. Compare Mesopotamia, Rome, and Han China through the Boix–Allen lens

  5. Evaluate critiques and propose empirical tests

Roadmap

Part 1: Motivation & objectives

Part 2: Core theoretical framework (Boix + Allen + North)

Part 3: Comparative evidence (Mesopotamia, Rome, Han China)

Part 4: Critiques, alternatives, discussion

Part 2: Core Theoretical Framework

What Are Institutions? (Douglass North 1990)

“Humanly devised constraints that structure political, economic, and social interaction”

Formal rules: constitutions, laws, property rights

Informal constraints: customs, traditions, norms, taboos

Enforcement: courts, social sanctions, reputation

Institutions reduce uncertainty and transaction costs

Two Institutional Archetypes (Acemoglu & Robinson 2012)

Inclusive

Broad property-rights protection

Participation and contestation

Rewards innovation (“creative destruction”)

Extractive

Power concentrated in elites

Extraction from many to few

Suppresses creative destruction → stagnation

The Boix Model: Producers vs. Looters (Boix 2015)

Forager societies: relatively egalitarian, mobile, low storage

Agriculture creates localized productivity clusters (spatial inequality)

New surplus becomes storable and defensible

Two strategies emerge: produce or loot

State emerges as protection racket or coordination device (depending on bargaining)

FIGURE 3 — The Boix Producer-Looter Model

┌─────────────────────────────────────────────────────────────────────────────┐
│                 THE PRODUCER-LOOTER MODEL (Boix 2015)                       │
└─────────────────────────────────────────────────────────────────────────────┘

                    PRE-AGRICULTURE                    POST-AGRICULTURE
                    ═══════════════                    ════════════════
                    
RESOURCES:          Mobile, dispersed                 Fixed, concentrated
                    (game, gathered plants)           (stored grain, herds)
                    
STORAGE:            Minimal                           Substantial
                    (spoilage, transport)             (granaries)
                    
DEFENSIBILITY:      Low                               High
                    (resources move)                  (land is fixed)
                    
                            │                                │
                            ▼                                ▼
                    
PREDATION           LOW PAYOFF                        HIGH PAYOFF
INCENTIVE:          • Hard to find                    • Easy to find
                    • Hard to take                    • Worth defending
                    • Little to take                  • Much to take
                    
                            │                                │
                            ▼                                ▼
                    
SOCIAL              EGALITARIAN                       STRATIFIED
STRUCTURE:          • Sharing norms                   • Elites emerge
                    • Low hierarchy                   • Exit costs high
                    
                            │                                │
                            ▼                                ▼
                    
STATE               MINIMAL                           EMERGES
FORMATION:          • No surplus to tax               • Protection racket
                                                      • OR coordination

KEY INSIGHT: Agriculture changed the PAYOFF STRUCTURE, not human nature.

FIGURE 4 — Archaeological Evidence: Heights as Inequality Proxy

The Boix Causal Chain

Geography/Climate → Agricultural potential

Agricultural potential → Spatial concentration of productivity

Concentration → Producer–looter dynamics

Dynamics → State formation + institutional type

Institutions → Innovation incentives → Economic performance

FIGURE 5 — Boix Causal DAG: From Geography to Development

Boix causal framework: geography operates through institutions, not directly

Factor Prices and the Direction of Innovation (Robert Allen 2009)

Innovation is not random: it responds to incentives

Inventors/firms economize on expensive factors

High wages → labor-saving innovation

Cheap energy → energy-intensive production becomes viable

Factor prices shaped by geography, institutions, and trade

FIGURE 6 — Allen’s Induced Innovation Mechanism

┌─────────────────────────────────────────────────────────────────────────────┐
│               INDUCED INNOVATION HYPOTHESIS (Allen 2009)                    │
└─────────────────────────────────────────────────────────────────────────────┘

                         RELATIVE FACTOR PRICES
                                  │
                 ┌────────────────┼────────────────┐
                 ▼                ▼                ▼
          ┌───────────┐    ┌───────────┐    ┌───────────┐
          │  LABOR    │    │  CAPITAL  │    │  ENERGY   │
          │  (wages)  │    │  (interest│    │  (fuel)   │
          │           │    │   rates)  │    │           │
          └─────┬─────┘    └─────┬─────┘    └─────┬─────┘
                └────────────────┼────────────────┘
                                 │
                                 ▼
                    ┌────────────────────────┐
                    │  INNOVATION DIRECTION  │
                    │                        │
                    │ Economize on EXPENSIVE │
                    │ factors by substituting│
                    │ CHEAP factors          │
                    └────────────┬───────────┘
                                 │
              ┌──────────────────┼──────────────────┐
              ▼                  ▼                  ▼
     ┌────────────────┐ ┌────────────────┐ ┌────────────────┐
     │ IF LABOR HIGH: │ │ IF CAPITAL     │ │ IF ENERGY      │
     │ Labor-saving   │ │ HIGH:          │ │ HIGH:          │
     │ machines       │ │ Labor-intensive│ │ Energy-saving  │
     │ (Britain 1800) │ │ production     │ │ technologies   │
     └────────────────┘ └────────────────┘ └────────────────┘

KEY INSIGHT: Same technology may be RATIONAL in one context and IRRATIONAL 
in another—depending on factor prices.

Allen’s High-Wage Economy Thesis

Britain had uniquely high wages relative to capital and energy

Coal abundant and cheap → energy-intensive mechanization profitable

High wages made labor-saving machinery worth developing

In low-wage societies, same machines often unprofitable

Synthesizing Boix and Allen

Boix: institutions emerge from material conditions + bargaining

Allen: factor prices direct technological change

Synthesis: Institutions → Factor prices → Innovation direction → Growth

Extractive institutions distort signals (forced labor, slavery, heavy extraction)

Inclusive institutions allow market-determined prices → stronger innovation incentives

FIGURE 7 — Integrating Boix and Allen

┌─────────────────────────────────────────────────────────────────────────────┐
│              INTEGRATED FRAMEWORK: BOIX + ALLEN                             │
└─────────────────────────────────────────────────────────────────────────────┘

┌─────────────┐         ┌─────────────┐         ┌─────────────┐
│  GEOGRAPHY  │────────▶│ AGRICULTURAL│────────▶│  PRODUCER-  │
│  & CLIMATE  │         │  POTENTIAL  │         │  LOOTER     │
└─────────────┘         └─────────────┘         └──────┬──────┘
                                                       │
                              BOIX'S FRAMEWORK         │
        ═══════════════════════════════════════════════╪═══════════════
                                                       ▼
                                               ┌─────────────┐
                                               │INSTITUTIONS │
                                               │   (type)    │
                                               └──────┬──────┘
                                                      │
                               ┌──────────────────────┼──────────────────────┐
                               ▼                      ▼                      ▼
                        ┌───────────┐          ┌───────────┐          ┌───────────┐
                        │  LABOR    │          │ PROPERTY  │          │  MARKET   │
                        │  SYSTEMS  │          │  RIGHTS   │          │  ACCESS   │
                        │ Slavery?  │          │ Secure?   │          │ Open?     │
                        └─────┬─────┘          └─────┬─────┘          └─────┬─────┘
                              └──────────────────────┼──────────────────────┘
                                                     │
        ═══════════════════════════════════════════════════════════════════════
                              ALLEN'S FRAMEWORK      │
                                                     ▼
                                             ┌─────────────┐
                                             │   FACTOR    │
                                             │   PRICES    │
                                             └──────┬──────┘
                                                    ▼
                                             ┌─────────────┐
                                             │ INNOVATION  │
                                             │ DIRECTION   │
                                             └──────┬──────┘
                                                    ▼
                                             ┌─────────────┐
                                             │  ECONOMIC   │
                                             │ PERFORMANCE │
                                             └─────────────┘

KEY: Extractive institutions + cheap/coerced labor → weak mechanization incentives

State Capacity: Necessary but Not Sufficient

States can promote innovation: infrastructure, property rights, public goods

States can suppress innovation: taxation, regulation, extraction

High capacity + inclusive institutions → growth

High capacity + extractive institutions → sophisticated extraction

Low capacity → limited ability to do either

Vocabulary Check

Institutions: rules of the game (North 1990)

Extractive: power concentrated; extraction from many to few (Acemoglu & Robinson 2012)

Inclusive: broad participation; protected property rights (Acemoglu & Robinson 2012)

Induced innovation: technology responds to relative factor prices (Allen 2009)

State capacity: ability to implement policy, collect taxes, project power

Part 3: Comparative Evidence and Cases

Three Ancient Societies, Three Paths

Mesopotamia: early state formation; cycles of centralization/collapse

Rome: engineering prowess; institutional sophistication; eventual stagnation

Han China: bureaucratic state; sustained innovation; different trajectory

Same broad era—different geographies and outcomes

What explains the variation?

FIGURE 8 — Three Societies Compared: Overview

┌─────────────────────────────────────────────────────────────────────────────┐
│                    THREE ANCIENT SOCIETIES: OVERVIEW                        │
└─────────────────────────────────────────────────────────────────────────────┘

                MESOPOTAMIA              ROME                 HAN CHINA
              (~3500-500 BCE)        (509 BCE-476 CE)       (206 BCE-220 CE)
              
GEOGRAPHY     River valleys           Mediterranean         Plains + rivers
              Tigris/Euphrates        Italy → empire        Yellow/Yangzi
              
CORE          Temple → Palace         Republic → Empire     Central bureaucracy
INSTITUTIONS  Cycles of unity/        Increasingly          Merit elements
              fragmentation           extractive            Confucian ideology
              
LABOR         Corvée + slavery        Massive slavery       Peasantry + corvée
REGIME        State-controlled        Conquest → slaves     Free farmers primary
              
INNOVATION    Writing, math           Engineering           Paper, iron casting
              Irrigation tech         Roads, concrete       Agricultural tech
              State-directed          Elite consumption     State-promoted
              
OUTCOME       Cycles of rise/fall     Rise then decline     Long stability
              No breakthrough         No breakthrough       No breakthrough

PUZZLE: Different paths, same stagnation outcome. Why?

Mesopotamia: Between the Rivers

Tigris and Euphrates: unpredictable flooding

Irrigation required collective action and central coordination

High agricultural productivity concentration

Surrounded by pastoral/nomadic populations (potential looters)

Classic Boix setup: productive clusters vulnerable to predation

Mesopotamian Institutions and Innovation

Temple economy → Palace-centered kingship (lugal)

Cycles: city autonomy → empire → collapse → repeat

Hammurabi’s Code: contracts, property, standardized punishment

Innovation: writing (cuneiform), mathematics, metallurgy, irrigation

Key pattern: innovation primarily state-directed (bureaucratic needs)

Rome: From Republic to Empire

Early Republic: relatively inclusive (for citizens); checks on power

Expansion → slaves + wealth concentration + land consolidation

Empire: increasingly extractive; weaker protections for non-elites

High capacity persists for centuries

Late Empire: administrative strain, fragmentation

The Roman Paradox

Engineering feats: aqueducts, roads, concrete, heating systems

Agricultural improvements: plows, presses, storage

Dense trade networks across the Mediterranean

Yet: limited labor-saving mechanization

Per-capita income stagnates then declines

Why Rome Didn’t Mechanize (Allen’s Logic)

Massive slavery → very cheap labor

Allen: cheap labor → low returns to labor-saving machinery

Estimates suggest up to 30% of Italy’s population were slaves at peak (scholars debate exact figures)

Why build a water mill when slaves can grind grain cheaply?

Elite preferences (“disdain for mechanical arts”) may reinforce, but incentives came first

FIGURE 9 — Factor Prices: Rome vs. Medieval Europe

Lower labor costs reduce incentives for labor-saving mechanization
Source: Conceptual illustration based on Allen (2009)

Han China: Bureaucratic Capacity

Unified empire with sophisticated bureaucracy

Meritocratic elements (exam system emerges over time)

State investment in infrastructure: roads, canals, frontier defense

Confucian ideology: stability, hierarchy, education

More nuanced than simple extractive/inclusive binary

Chinese Innovation Under the Han

Paper (~100 CE): transforms bureaucracy and education

Iron casting: often superior to Roman wrought iron

Agricultural tech: iron plows, rotation improvements

Water control: large canal systems

Yet China also didn’t industrialize—why?

The Needham Question

Joseph Needham (Science and Civilisation in China, 1954–): why no Chinese Industrial Revolution?

Institutional hypothesis: exam system, unified empire, limited interstate competition

Factor-price hypothesis (Allen): abundant labor → weak mechanization incentives

Geographic hypothesis (Pomeranz): coal in “wrong” place; no “ghost acreages”

No consensus—active scholarly debate continues

Common Pattern Across Cases

Despite different paths, all three reached similar stagnation outcome

Mesopotamia: extractive temple/palace economies + coerced labor

Rome: massive slavery → suppressed wages → weak mechanization incentives

China: abundant labor + institutional barriers to diffusion

Framework explains both achievements AND limits

Setting Up the Modern Breakthrough

Pre-modern world: limited sustained per-capita growth is the norm

Medieval Europe: fragmentation + rising wages + cheap energy in places

Industrial Revolution emerges from a rare combination

Allen: Britain’s factor prices made mechanization profitable

Long-run takeaway: geography, institutions, and factor prices interact

Path Dependence and Institutional Lock-In

Institutions persist: elites defend equilibria that benefit them

Extractive institutions create beneficiaries who block change

Change requires shifting bargaining power, often via shocks

“Critical junctures” (war, plague, revolution) can open windows for reform

What Have We Learned from the Cases?

Geography shapes initial conditions but not final outcomes deterministically

Institutions emerge from bargaining, not pure efficiency

Cheap labor undermines mechanization incentives (Allen mechanism)

State capacity can serve growth or extraction

Similar “stagnation” endpoint can arise via different pathways

Part 4: Critiques, Alternatives, and Discussion

Critique #1: Geographic Determinism?

Critique: Boix overweights geography

If geography → institutions → outcomes, is geography destiny?

Response: geography shapes parameters, not outcomes

Same geography can yield different institutions (contingency matters)

But: contingency may be underspecified

Critique #2: Culture and Ideas

Mokyr (2016): Enlightenment ideas enabled sustained innovation (“culture of growth”)

Weber (1905): ethics/values shaped capitalism

Critique: Boix/Allen too materialist

Counter: culture may be shaped by material incentives

Did Romans disdain mechanics because of culture, or did cheap slaves make mechanics economically irrelevant?

Critique #3: Reverse Causation (Endogeneity)

Do institutions cause growth—or does growth enable inclusive institutions?

Selection bias: successful cases get more attention

Need exogenous variation to claim causality

Colonial institutions as quasi-natural experiment (Acemoglu et al. 2001)

Critique #4: Oversimplification

Extractive/inclusive can be too binary

China: bureaucratic + meritocratic elements (hybrid)

Rome: varies over time and region

Need richer typologies for institutions and innovation regimes

What Would Change My Mind? (Falsifiers)

Sustained growth under clearly extractive institutions (without catching-up logic)

Stagnation despite inclusive institutions and “good” factor prices

Cultural change repeatedly preceding material change (robustly)

Successful institutional reform that ignores factor-price context

Archaeological evidence contradicting inequality–agriculture link

Discussion Questions

Can institutions be reformed by design, or must material conditions shift first?

Is the US today more extractive or inclusive than in 1950? Why?

What would Boix/Allen predict about AI and automation effects?

Are there “developmental states” that contradict this framework?

How should ancient history inform modern development policy?

More to Consider

If slavery explains Rome’s stagnation, why did the antebellum US South innovate at all?

Does China’s recent growth contradict Acemoglu & Robinson?

Would an industrial revolution have happened “somewhere” eventually?

What role do small-scale institutions (firms, guilds) play?

How should we weight structural vs. contingent factors?

Key Readings

Boix, C. (2015) Political Order and Inequality, Ch. 1–4

Allen, R.C. (2011) Global Economic History: A Very Short Introduction

Allen, R.C. (2009) The British Industrial Revolution in Global Perspective

Acemoglu, D. & Robinson, J.A. (2012) Why Nations Fail, Ch. 1–2

North, D.C. (1990) Institutions, Institutional Change, and Economic Performance

Extended Reading List

North, Wallis & Weingast (2009) — Limited vs open access orders

Scheidel, W. (2019) — Escape from Rome; empire as innovation suppressor

Mokyr, J. (2016) — A Culture of Growth; ideas as key driver

Pomeranz, K. (2000) — The Great Divergence; late/contingent divergence

Tilly, C. (1990) — Coercion, Capital, and European States

Scott, J.C. (2017) — Against the Grain; early states as extraction